By CARL E. FEATHER - Lifestyle Editor - firstname.lastname@example.org
A policy paper by Catholic Charities USA, “Poverty in America: A Threat to the Common Good,” observes that since 1980, increased worker productivity has not resulted in real increased wage gains. Workers have been working harder and being more productive for their employers, but, generally, they have not shared in the bountiful harvest.
Paul Bellamy, special counsel to the Equal Justice Foundation, a nonprofit organization based in Columbus, says over the past 30 years, a loosening of credit has allowed employers to keep wages relatively low and profits high because consumers were given the credit resources with which to finance this shortfall. This approach has also been a huge boom for the consumer credit business.
As the subprime lending crisis is demonstrating, that model can’t continue forever.Many workers are falling behind or defaulting on their mortgages, credit card payments and auto loans as prices for commodities rise and payment capacity is squeezed.
Consumer debt grew 12-fold from 1950 to 2007, even after adjusting for inflation. Fifty-seven years ago, consumer and mortgage debt accounted for about 30 percent of the consumers’ disposable income, according to federal reports. Today, it is 111 percent. In 2007, consumer credit grew 5.5 percent, up from 4.5 percent in 2006.
Sources: Associated Press, Catholic Charities, Plain Dealer